Trade impacts on developed market equities

Sources: Bloomberg and Wells Fargo Investment Institute. MSCI EAFE Index: quarterly data from January 1, 1982 to September 30, 2021. Global exports: quarterly data from January 1, 1982 to June 30, 2021. YoY = year-over-year. The MSCI EAFE Index captures large and mid cap representation across 21 DM countries (excluding the U.S. and Canada),around the world. Index returns do not represent investment performance or the results of actual trading. Index returns represent general market results, assume the reinvestment of dividends and other distributions, and do not reflect deduction for fees, expenses or taxes applicable to an actual investment. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. Global exports are total world exports from the International Monetary Fund (IMF).

Equity securities are subject to market risk which means their value may fluctuate in response to general economic and market conditions and the perception of individual issuers. Investments in equity securities are generally more volatile than other types of securities. Investing in foreign securities presents certain risks not associated with domestic investments, such as currency fluctuation, political and economic instability, and different accounting standards. This may result in greater share price volatility.

MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI.

Key Takeaways

  • Global trade has been marred by regional disparities, with poorer countries suffering due to lagging vaccination rates.
  • Trade volume is expected to increase by 8.0% in 2021 which supports export-oriented developed market equities.